Deadline for private sector Cook Strait Interislander ferry proposals is tonight

• The deadline for alternative Cook Strait ferry private sector proposals expires at 6pm tonight.
• Negotiations to exit a contract with Hyundai Mipo Dockyard continue more than a year after the mega ferry contract was cancelled.
• There is speculation Winston Peters could visit HMD during his visit to South Korea this week.

Treasury says there has been an “encouraging ” response from the private sector for alternative Cook Strait ferry procurement options.

The deadline for submissions is 6pm tonight.

The future of the ageing Interislander fleet hangs in the balance as Winston Peters, who is now in charge of delivering the new ferries as the Minister for Rail, is on the hunt for a better option than the one Finance Minister Nicola Willis put on the table last year.

The Government has established a Schedule 4A company called Ferry Holdings Ltd to procure the two medium-sized, rail-compatible ferries Willis announced.

The Government has also invited the private sector to submit alternative proposals for a ferry service, which will be assessed alongside the procurement process in March.

Details on the Government Electronic Tenders Service (GETS) website invited ideas from the private sector for “alternative options for the Government to procure ferry services, including for rail-enabled ferries”.

The future of KiwiRail's Interislander fleet hangs in the balance. Photo / Mark Mitchell

The mention of rail-enabled ferries is notable given that one of the biggest sticking points for KiwiRail’s new Interislander ferries has been whether they will be rail-enabled.

The ferries Willis announced were rail-compatible, meaning containers are removed from the rail wagons by a vehicle that then loads them on to the ferries.

Peters has said rail-enabled ferries should be in the mix, meaning trains can drive directly on to the ferries and off again, making for a seamless transition for freight across Cook Strait.

GETS said further information would only be provided to eligible private sector parties based on a non-disclosure agreement to protect commercially sensitive and confidential information.

“Eligible parties are experienced maritime transport operators or infrastructure investors.”

A Treasury spokesman said the response to the alternative market proposals process and ongoing engagement with international shipyards has been encouraging.

“Once the market sounding process closes, the Treasury will assess the applications and prepare advice for ministers.

“This assessment will involve the Ferry Holdings board. Cabinet is expected to make decisions in late March, after which announcements will be made about the outcomes of the process.”

Meanwhile, BusinessDesk has reported Peters, who is also Deputy Prime Minister and Foreign Affairs Minister, could meet representatives of Hyundai Mipo Dockyard (HMD) during his visit to South Korea this week.

HMD was going to build the now-cancelled mega ferries. Negotiations to exit the contract have been playing out for more than a year now.

Asked whether Peters had plans to visit the shipyard, a spokesman for his office said the minister would be having a bilateral meeting with South Korean Foreign Minister Cho Tae-yul.

Deputy Prime Minister Winston Peters visited the Middle East and North Asia this week.

Asked what concerns the minister had about the length of time taken to exit the HMD contract, the spokesman said that was an operational matter for KiwiRail.

The only update KiwiRail would provide from chief financial officer Jason Dale was that “negotiations with HMD are continuing and commercially sensitive”.

Asked whether negotiations were ongoing because there could be an opportunity for HMD to build the alternative ships, the spokesman for Peters' office said: “New Zealand is exploring a wide range of options globally in the procurement of new inter-island ferries.”

The Herald asked KiwiRail the same question but this was referred to Treasury.

A Treasury spokesman said the Minister for Rail’s office would respond on behalf of the Government.

In a question-and-answer document attached to a Beehive press release from December about the way forward for the ferries, the question of whether HMD is a candidate to build the new ferries was addressed.

“The candidates to build the new ferries will be decided through the procurement process. No shipyards have been ruled out at this stage,” the document said.

KiwiRail chief executive Peter Reidy has previously told the Herald they were trying to separate the mega-ferry contract claim from any other discussions KiwiRail and the Government might want to have with HMD.

Reidy said HMD had asked for the two matters to be kept separate and he had established a separate workstream within KiwiRail to accommodate this.

“You can imagine at times it might get a bit murky but we try and keep that very separate.”

Georgina Campbell is a Wellington-based reporter who has a particular interest in local government, transport, and seismic issues. She joined the Herald in 2019 after working as a broadcast journalist.